Sample Chapter

Recruiting:

The Seeds of a Dream See the happy moron, He doesn't give a damn. I wish
I were a moron-My God, perhaps I am! -Anonymous rhyme

In the middle of Times Square, at the intersection of Broadway and
Forty-third Street, sits what was once the United States Armed Services'
premiere recruiting office. The office, built almost fifty years ago,
was conceived as a shining testament to the unlimited promise of a
military career, positioned as it was in the middle of the Crossroads to
the World. Today, though, it is only a vague reminder of what it once
was. Vagrants use the back of the building to provide some relief from
the summer sun, and occasional relief from a bottle of Boone's Farm. On
a good day, a few listless teenagers may wander in to find out exactly
how much they'll get paid to be all they can be.

With the decline of the military's once-venerable institution, however,
has come a concomitant rise in another recruiting institution: the Wall
Street Investment Banking Machine. From lower Manhattan to midtown, the
well-oiled device hums around the clock and around the calendar. Its
serpentine tentacles are rooted in nearly every well-regarded
undergraduate institution in the country and all of the top business
schools. The machine's sole objective: to fill the conduit with as many
analysts and associates-the serfs and indentured servants of the
investment banking world-as it can find.

Ultimately, as we would find out, a large part of any investment bank's
success becomes a function of how many bodies it can throw at a given
piece of business, or, even more important, a potential piece of
business. The effort to fill the pipeline with these bodies, therefore,
is never ending.

The Analysts

At the lowest level of the investment banking hierarchy are the
analysts. To find this young talent, the I-banks send their manicured
young bankers out to the Whartons, Harvards, and Princetons of the world
to roll out the red carpet for the top undergraduates and begin the
process of destroying whatever noble ideals these youngsters may still
have left. For the recruiting banker, the ideal analyst candidate is
somebody with above-average intelligence, a love of money (or the
capacity to learn that love), a view of the world conforming with that
of the Marquis de Sade, and the willingness to work all night, every
night, with a big grin on his face, like the joker from Batman.

The analysts are at the bottom of the s**t heap. They are the algae
under the rim of the public toilets at the Port Authority bus station,
the scum below the scum at the bottom of a beer keg. They'll spend two
to three years being mentally, emotionally, and physically abused, and
for that benefit they'll be well trained and extremely well compensated.
No matter how bad things get, they'll never have anybody lower on the
corporate totem pole to whom they can off-load their misery.

Following their two- to three-year stint, the vast majority of the
analysts will either strike out for any of a handful of graduate
business schools, depart the firm for other opportunities within Wall
Street's financial community, or regain their sanity and elect to pursue
other interests entirely. There's very little upward mobility from the
analyst programs into the higher echelons of the investment bank.
Analysts quickly learn, in no uncertain terms, that their days as
analysts terminate after three years. To the uninitiated this may seem,
at best, shortsighted and, at worst, akin to infanticide. Why jettison
these young minds with two to three years of hard-core financial
training? The answer is simple. The analysts have been tortured and
abused for three years. They've reached the point of being dangerous. To
keep them on would be to institutionalize sure seeds of discontent
within the investment bank.

A majority of the analysts leave the job pissed off and with a
deep-seated hatred of the investment banking institution. They learned a
lot and enjoyed being paid more money than they ever thought they could
make, but they also despised the work and the people that made them do
it. However, amazingly, it seems that about 50 percent of those analysts
who hated what they did go back into investment banking after two years
in a graduate business school program. Somehow, absence makes the heart
grow fonder. As with a bad injury, they tend to forget how terrible the
pain was. They know it was horrible, but they just can't remember
exactly how much it hurt. So these analysts go back into banking
thinking that life as an associate will be different. Basically, they
reinjure themselves. Troob was one of these injured veterans who decided
to return for a second tour of duty.

The Associates

At the next rung up the investment banking ladder are the associates,
that's what we were. You can generally assume that the associates are a
happier lot than the analysts, since they have both the institutional
backing and the ability to ease their own misery by heaping agony onto
the analysts. Therein lies the beauty of the heirarchy. Since the
investment banks are in the aforementioned practice of regularly
paroling virtually the entire third-year analyst class, which class
would have included any analysts with the potential for promotion to
associate, the recruitment of associates and the replacement of these
departing third-year analysts becomes a full-time process.

For the associates in an investment bank, there is no corresponding
get-out-of-jail-free program to avail oneself of at the end of a
two-to-three-year stay. There is no light at the end of the proverbial
tunnel. The associates are recruited under the expectation that they
know what it is they're signing on to do, and that once on board,
they'll dutifully climb the corporate ladder to the top of the golden
pyramid. Vice president, senior vice president, managing director. The
path is clear. In reality, the attrition level for associates is fairly
high. They leave for competing investment banks. They leave to work for
clients of the investment bank. They leave when they realize that sex
with themselves is becoming the norm. Whatever the reason, between the
moles brought on board to climb the ladder, and those helicoptered in to
replace the departing lemmings, the flood of fresh-faced associates is
constant.

The Others-Vice President to Managing Director

Above the associates are the vice presidents, the senior vice presidents
(or junior managing directors, depending on the firm), and the managing
directors. The associates all have the same goals. They want to make
vice president in three to four years, senior vice president in five to
seven years, and managing director in seven to nine years. They all hope
to be making seven figures by the time they hit managing director.

Sometimes, though, from the associates' perspective, it seems like there
are just three levels in the banking hierarchy: analysts, associates,
and everybody else. After all, anybody senior to an associate has the
institution's divine sanction to s**t on the associate's head, and if
you're the one getting s**t upon there isn't usually much reason to
further subdivide the hierarchy of those doing the s**tting.

The Breeding Ground-Business Schools

The most fertile grounds for the associate recruits are the nation's
graduate business schools. Due to the sheer number of recruits now
requisitioned by Wall Street, the preferred hunting grounds have
broadened from their original select subset of only the most arrogant
Ivy League institutions of the East (i.e., Wharton, Harvard, Columbia)
to include other marginally less pompous institutions. As distasteful as
this decrease in the overall level of enlistees' arrogance has been for
the old-line bankers, it has been driven by necessity.

The business school students, for their part, are in no way gullible
victims of the evil capitalist pigs. Most have returned to business
school with a sole objective: to further their career goals through
exploitation of the recruiting opportunities that the business schools
provide. In all fairness, it should probably be acknowledged that a
small minority of the graduate business school students do in fact
return to school with the accumulation of knowledge as a primary
objective. Those that do, however, are swiftly enlightened and made to
see the error of their ways.

The indoctrination into the money culture and the transition to
job-search mode begins long before the arrival of the MBA-to-be on
campus. Following the receipt of the school's acceptance letter, which
goes to great lengths to assure all budding MBA candidates of their
status as members of an academic aristocracy, a large packet follows in
the mail.

At Wharton and Harvard, the packet was similar. It was filled with
policy manuals, health care application forms, and sundry other
administrative delights. The most important enclosure in the Wharton
packet, however, was a pamphlet titled The MBA Placement Survey. The
placement survey was a gold digger's delight. Every imaginable statistic
on the recruiting success, or lack thereof, of the prior year's business
school denizens was broken down and reported: percent taking jobs in
given industries, percent taking jobs with given employers, percent
taking jobs in given geographic regions, it was all in there. There was
only one overriding statistic that really mattered to the budding MBA,
though: average starting salary by industry. The first time I saw these
figures, my ticker skipped a beat. I was a guy who was coming out of the
advertising industry making $17,500 a year and eating black beans and
rice four nights a week. There were salaries in The MBA Placement Survey
with six figures, and that wasn't counting any decimal places.

We were entering the land of the obscene here. If the starting figures
were up on into six-figure range, where would the madness end?

A somewhat closer look at the heavily laminated pages should have
yielded another clue as to the goals and mind-sets of our future
business school classmates. The two job categories snaring the highest
percentage of the graduating class, management consulting and investment
banking, also happened to have some of the highest starting salaries. A
coincidence? I think not. Troob and I were about to jump into a
velvet-walled cage with some of the greediest bastards this side of
Ebeneezer Scrooge. Unfortunately, at the time, we were both wrapped up
in a Richie Rich fantasy of our own. We were about to start a frenzied
two-year race with America's most prized business school graduates,
blindly thrashing our way toward the almighty dollar.

At Wharton, the official start to this seminal marathon was the "Welcome
to Wharton" seminar during orientation week. Whatever delusions I may
have had prior to this cozy little gathering were quickly dispelled.
Surrounded by 750 other hearty young business schoolers in a massive
auditorium, all feelings of being part of something elite, something
special, began to melt away. When the progression of second-year
students took the podium and began describing, in lurid detail, exactly
what awaited everyone on the job-search front, the essence was laid
bare. We were there for a two-year mating dance with the recruiters.
What the Wharton name would get us was a shot at the best of those
recruiters. Given that opportunity, though, it would be up to us to
distinguish ourselves from the sea of equally qualified candidates in
the seats all around us. We'd have to be willing to climb over these
people while wearing golf shoes with sharpened cleats to get where we
wanted-no, needed-to be. F**k camaraderie.

What I didn't realize at the time was that not everybody in that
auditorium was reaching these same wrenching realizations that day.
Something between a sizable minority and a majority of my new classmates
that day already knew exactly what game was being played. There were
bastards there who knew what awaited them, and had voluntarily come back
to subject themselves to the process, all for the sake of professional
advancement and the accoutrements that accompanied it.

The phenomenon, mind you, was in no way peculiar to Wharton. In fact,
350 miles to the north, at that most venerable of all institutions-the
Harvard Business School-a like scene was being played out. And among the
750 dandy young recruits there was one of those bastards who knew the
game. A stocky little former investment banking analyst whom I'd later
come to love as we wallowed together in our collective misery paying our
dues as investment banking associates at DLJ. Peter Troob.

Later, after we got to know each other, Troob would confirm my suspicion
that things at Wharton and Harvard were just about the same.

Yeah, I was going through the same mating dance at Harvard Business
School. However, I had a big advantage: I'd worked in investment banking
before going back to business school. I'd been an analyst at Kidder
Peabody. I knew the pain, I knew the long nights and the late dinners
eaten in the office six nights a week.

The thing was that I had sworn off investment banking. The sixteen-hour
days, the people who had institutional authority to kick my ass, the
extra ten pounds I had put on since college, and my nonexistent social
life. The investment banking life as a junior guy sucked and I knew it.
It paid me well for a twenty-two-year-old snot-nosed brat from Duke,
helped me get into Harvard, and taught me how to break out a company's
financials with my eyes closed, but as I sat in Harvard Business School
I promised myself that I wouldn't go back. No way. I promised myself
that I would find a more rewarding career, one that made me feel good
about myself. One that cleansed my soul instead of soiling it.

So why was I willing to jump right back in? That's a good question. I
remember sitting with one of my good friends, Danny, in the steam room
at the beginning of the school year discussing that very question. We
had both come from a two-year boot camp at Kidder Peabody and we were
both at HBS. Danny asked the question first.

"Consulting? Making all those two-by-two charts and matrices and being
shipped to some buttf**k place like Biloxi, Mississippi, to help consult
some manufacturing company for two months? No thanks."

"Yeah, maybe you're right, Danny Boy. Not consulting. I'll try to get a
job in a buyout fund."

"Yeah, right, Troob. Tommy Lee is only taking two guys this year and KKR
is taking one. You're good, but either your dad has got to be loaded or
you've got to get the managing partner laid if you want that job."